Story behind massive discounts on Flipkart, Amazon and Snapdeal - You should know

Story behind massive discounts on Flipkart, Amazon and Snapdeal in India.

Well from last few years the e-commerce market in India growing rapidly. The one of the reason for this is Massive discount on products as compare to retailers in India. And the trust of people on them.

But the question rises here that How can they give such a huge discount on product with free home delivery facility. For proper understanding our recommendation to you is that read whole article if you don't then you may lead to misconception.

E-commerce companies like Flipkart, Amazon and Snapdeal are providing huge discounts on products. They use complex policy behind this just like some conglomerates have adapted to by pass foreign direct investment laws in India. After knowing the process it may seems to you that its not that much though but in reality it is.

The three companies Flipkart, Amazon, Snapdeal works as a marketplace in India. As they cant sell product directly to customer from manufacturer. But they can link the customer to seller that's what these e-commerce companies are doing.Then also they are managing the price of product very at profit. All three companies finance the discount offered by seller sometime completely and sometimes partially.

Let us begin with Flipkart :

Flipkart has its own merchant a WS retail. Which was owned by both Bansal brothers. WS Retail Services Pvt. Ltd, a seller on Flipkart, accounts for more than 75% of the site’s sales. For products sold by WS Retail, Flipkart doesn’t fund discounts. However, with other smaller sellers, Flipkart suggests prices.For the discounts offered, Flipkart do not do promotional funding but forgoes commissions or listing fees that marketplaces usually charge from their sellers.

Amazon

Amazon works on its own strategy, it compares the prices of products with other e-commerce companies and according to that Amazon recommends the amount of discounts to its seller. But they don't force their sellers to give such a discount. However the sellers many time adopts that discount because ending up selling the products at suggested discount, Amazon finances the discount. This is how they work.

Snapdeal

Snapdeal also deals with its own policy for sellers and buyers.It pays sellers by RT-GS using  Internet banking fund transfers, or by cheque. Snapdeal refers to the discounts as “promotional expenses”. During Snap deal's recent Buy One, Get One promotional offer, sellers were paid for both products by Snapdeal, which charged its commission fee only on one item.

Well this was the policy which three companies follows for Sellers and buyers to give the massive discount.

The big difference between e-commerce and retailers :

The products which comes to retailers shop it reaches to shop by performing the chain.

There reaching process of products to shop for Retailers ;

Manufacture > Brokers OR distributor > Whole sellers > Retailers > Customers

As you can see that there is long chain to reach the products to customers so there is Commission for every person which rises the prices of the products. And also they include the transportation cost. All these factors make impact in the price of products.

Process of e-commerce companies ;

Manufacturer > Whole sellers > Customers

E-commerce companies have reduced the chain to reach the product to the customer. Which reduces the prices of products. And they offer such reduced prices as a discount.

And the other important thing is that the Quantity matters. As all knows in the business of trading what is the factor Quantity for them.
The e-commerce is growing rapidly hence the product trading is increasing rapidly. So the whole sellers of e-commerce companies demands more products to manufacturers. They order more quantity as well as they sells the more products in less time than. So whole sellers of e-commerce demands the discounts to manufacturers companies which costs them products at less price. And they directly sells to customer which gives them a great profit and e-commerce companies too..

We hope you would have understood it properly.

And it's overview of there policy as per our research. As none of any companies shares there strategy. So we can not say they works only on these policy.
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